10 Biggest Cause of Business Failure - ENTREPRENEURS

Do you want to start a business but afraid of business failure? I will be putting you through on t...

Do you want to start a business but
afraid of business failure? I will be putting you through on the main
causes of the many business failures and how you can avoid them.

Any entrepreneur starting a business venture has PROFIT
in the back of their mind. Owning a business can be rewarding and at
the same time very risky. There are certain factors that can cause
business failure but lack of proper research for profitable market
before venturing is one of the main cause of business failure.

Passion is a key for success in business
but it cannot guarantee profitability. If you are passionate about
something but cannot monetize it, and yet you venture into it, then you
are more of a social entrepreneur who might be providing a service for no or minimal reward.

It is pertinent that you do a thorough
research, consult before you venture into any business. Nobody wants a
failed business. The pride of every entrepreneur is to see his/her
business growing and making steady profit.

Some entrepreneurs have started
businesses but because of some certain factors, the business becomes a
failure after a short while. I will be discussing some underlying causes
of business failure with you.

Outline of Causes of Business Failure

1. NOT SEEKING PROFESSIONAL ADVICE

No matter how informed you feel you are,
once you want to startup a new line of business, it is pertinent that
you seek professional advice. This will help you ascertain whether or
not the business is profitable as you thought. Most times, entrepreneurs
start up a business because they find others doing the business and
profiting. Yes, they might be profiting from the same business but there
might be a secret behind the success. It might be location, good
customer service, knowing the right source to get raw materials etc.

It is good you have a mentor that will
always put you through to avoid silly mistakes. Another advantage of
seeking professional advice is that, you are meeting people that have
already done the business and they have made the mistakes and known the
best way of doing it.

The likes of Bill Gates and Sir Richard Branson have Warren Buffet and Sir Freddie Laker respectively as their mentors. If they had advisers, why can’t you?

One of the best pieces of advice I can
give to anyone in business is never stop learning, read and learn about
marketing not just about your industry but how other industries buy and
sell products and service and how you can do things even better.Also Read: 10 Stupid Mistakes Entrepreneurs Are Still Making

Avoid Negative People

2. LACK OF GOOD CUSTOMER CARE

It is very important that you make your
customer care a priority. A business with good customer care grows. Good
customer care brings return customer and return customers bring
referral customers. If you do not treat your customer well, they go to
your competitors. Learn to show your customers that you appreciate them.
Always ask them questions about the product and offer them some
percentage when they give your product a review (either positive or
negative review). If you are not close to your customers, if you treat
them like every other seller, they will only come when there is no other
option. Bad customer care has killed a lot of businesses.

Your Customer Care Unit Defines Your Brand

3. COPYING OTHERS

What worked for Mr. Francis must not
work for Mr. Reader. Many people have gone into business or made a
business choice because they see others doing it and think they can be
successful in it if they try. It is good you add your own idea after
proper consultation, that will distinct you from others. Copying without
consultation leads to dead end.Also read: 3 Reasons You must know about Copywriting

Do Not Copy, Initiate

4. LACK OF EXPERIENCE

Lack of experience is one of the causes
of business failure. If you are inexperienced or your management is made
up of novices, then your business is as good as dead. When starting a
new business, it is advised you get the services of people experienced
in that field. They can be your partners or you employee. Get
experienced marketers and well trained customer service personnel.

Experience Count

5. UNACCOUNTABILITY

You must be accountable for any dime
your business makes. Most times, many entrepreneurs could not account
for their daily sales. Once there is a sale, they spend the money on
personal needs believing that they will make another sale. If you must
succeed in business, you must be accountable for every dime that you
make. Make sure you plan out your spending, for a business you plan to
grow, 60% of your profit must go back into the business and that is
after removing tithe (10% of your income).

Be Accountable

6. LACK OF PERSONAL GROWTH

Many entrepreneurs do not invest on
themselves. They want to be great but they do not read nor research,
neither do they attend seminars and workshop that can increase their
knowledge base. Personal development of your attitude and communication
skills is a must. It is hard work and it takes discipline. You will have
a hard time succeeding without protecting and working on your attitude.
No one gets ahead in life without building themselves with new
knowledge.

Never Stop Learning

7. POOR LOCATION

There was an entrepreneur who had a
coffee shop in a local area. His coffees are nice and affordable. He
relates very well with his customers. But over the years, his coffee
shop was not growing and he could hardly maintain the place so he
decided to sell the shop. Another 29 year old entrepreneur with enough
capital felt he can make the coffee shop profitable by injecting cash
into the business and making it classier. He also could not make the
coffee business profitable. Why? Because of the business location.
Bottom Line, you cannot start a business where the service is not
required. Making it classy will not make people to patronize you. A good
market survey is required before a business location is chosen.

Poor Location Equals Reduced Patronage

8. LACK OF FOCUS

Entrepreneurs can easily be distracted
with too many minor tasks. Everyday that their focus tends to shift,
their thinking shrinks. A good entrepreneur or business person will
never lose focus on what’s important and where their priorities are. The
weakness is when they get caught up in trivial perfectionism in the
tasks which can and should be left to others. Entrepreneurs should learn
to delegate tasks. The short-sightedness become obvious when DOING
rather than BECOMING becomes an obsession.

Being busy does not mean being productive

9. WRONG EXPECTATIONS

Some startups were being sold the idea
that all they need to do is get into business and the money starts
rolling in without doing anything. Sometimes it is the person’s fault
because they only hear what they want to hear or they think they know
better. Bottom line, building a successful business is not a 60-yard
dash but a marathon. If you don’t want to die in poverty or see your
business collapse, then you must be diligent.

Do Not Expect What You Didn’t Work For

10. QUITTING TOO SOON

This is the biggest reason why many
businesses fail. If you do not persevere, enquire, research, fail and
try and try again, you might not be successful in business. First, you
should know that any business done half way can never be a success. You
must strive against all odds to make a business stand. Another problem
that has close many businesses almost as soon as they start is
inadequate funding or paucity of fund. Many entrepreneurs make the fatal
mistake of commencing on business with inadequate operating funds. Such
businesses don’t last as the initiators will easily be discouraged
especially when there are big competitors.

I advice, before you start any business, have the mindset of “I will do
whatever (Positive) it will take to succeed”, that alone is the
beginning of your success. That mindset will help you broaden your
business scope.

Try and Try and Try Again

CONCLUSION

There are other factors or reasons an
entrepreneur might experience business failure but the above 10 from my
years of experience in business are the major causes. If you can
overcome the listed causes, you are not far from being a success in any
chosen field in business.

As I wish you well in your business, it will be good if you share
this article with you FAF using the social media buttons below, maybe
they will learn a thing or two that can change there business or mindset
towards business.

Note this quote from one of my favorite successful entrepreneur:

“Success is a lousy teacher. It seduces smart people into thinking they can’t loose” ~ Bill GatesArticle republished from http://www.thetotalentrepreneurs.com